What is not Covered in Car Insurance?

Motor vehicle insurance coverage is mandatory by law when purchasing a motor vehicle in India. It must be bought at the time of purchase of the vehicle to safeguard oneself from certain unexpected additional costs in case of accidents or calamities.There are two kinds of insurance covers, third-party insurance and comprehensive insurance. Broadly, these insurances provide protection under the following man-made and natural calamities:

1. Damage to the vehicle in case of riots, strikes, or an act of terrorism.
2. Losses caused by natural calamities such as floods, earthquakes, hailstorms, etc.
3. Damage to the vehicle or bodily harm to the driver in case of an accident.
4. Loss or theft of the vehicle.

1. First and foremost, as the vehicle ages, the wear and tear caused to it, is not covered under the policy cover.
2. In case of an anomaly in the contract between the individual and the insurance company, the insurance cannot be claimed.
3. Any damage caused to the vehicle in the gaps between the insurance cover’s expiry and renewal is not considered.
4. Damage to the engine due to oil leakage is not covered.
5. In case the vehicle was being driven by an individual under the influence of alcohol or drugs, the claim is not entertained.
6. Damage caused to the vehicle while being driven by an underage individual or a person without a valid driving license are not covered under the policy.
7. Insurance is not provided to the individual if they suffer from bodily harm or death in the case of alighting from a moving vehicle.
8. Loss or damage to the vehicle while being used outside India is not accounted within the policy.
9. Any deliberate damage, which is found fraudulent, is not covered by the policy. This includes mechanical damage due to not following the manufacturers’ guidelines.
10. Consequential loss due to the negligence by the owner is not covered.
11. In case the primary policyholder does not provide evidence that the ownership of the vehicle has been transferred, and thus has been insured by the new owner, it is not possible to claim the premium fees paid to the insurance provider.

As motor vehicle insurance coverage is mandatory when buying a vehicle, it is advisable to discuss the policy options with your bank or insurance company to determine which cover would be best suited to you and your lifestyle. Also, at the time of selling your vehicle, do make sure that the documentation is properly annulled or transferred in the name of the new owner.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.